|Bid||32.900 x 0|
|Ask||33.000 x 0|
|Day's Range||31.850 - 34.600|
|52 Week Range||4.720 - 37.700|
|Beta (5Y Monthly)||1.39|
|PE Ratio (TTM)||N/A|
|Earnings Date||Mar 22, 2019|
|Forward Dividend & Yield||N/A (N/A)|
|Ex-Dividend Date||Dec 04, 2014|
|1y Target Est||24.50|
(Bloomberg Opinion) -- For weeks, those of us in Asia watched the U.S. stock frenzy with amazement — how a video game-like trading interface could lure millennials, cost fortunes and some even their lives; how Tesla Inc. founder Elon Musk became richer than Warren Buffett; and why on earth retail investors were rushing to buy shares of Hertz Global Holdings Inc., even though the car rental company had filed for bankruptcy. Well, gawk no more. The mania has landed in Hong Kong, too. Take a look at Evergrande Health Industry Group Ltd., a healthcare facilities provider under the umbrella of real estate giant China Evergrande Group. Its stock price has soared more than 200% this year, with most of the gain notched in July. That’s resulted in a market cap as high as $30 billion this week. The catalyst is not its Elderly Care Valley business, which operates specialized centers, but its electric vehicle operations, accounting for only 12% of sales last year. There’s little news on Evergrande Health — it isn’t even covered by the sell-side equity analysts Bloomberg polls — but some investors have latched onto this stock as a Tesla play. Its parent company has the grand ambition to be more Tesla than Tesla, vowing to become the world’s biggest maker of electric vehicles. Since late 2018, Evergrande has spent billions on an array of EV-related companies. Goodwill, accrued upon a series of acquisitions, came in at 6.2 billion yuan ($885 million), or 17% of the company’s non-current assets at the end of 2019.Never mind that Evergrande has yet to release its first pure battery vehicle under the flagship Hengchi brand — that deadline was already pushed back once — or that its factories in Guangdong and Shanghai won’t start production until 2021. That Tesla stock could draw 40,000 Robinhood users in a four-hour window shows there’s enough appetite for anything remotely like the U.S. market darling. Investors may also feel reassured now that Evergrande Health owns National Electric Vehicle Sweden AB, an EV maker that acquired Saab Automobile in 2012. It also has a joint venture with Koenigsegg Automotive AB, a top-tier supercar manufacturer. If anyone bothered to look at the company’s financials, though, they’d quickly get cold feet. According to its latest annual report, “equity attributable to owners of the company” was negative 1.3 billion yuan. In other words, while stock investors think Evergrande Health is worth $30 billion, an accountant could reckon that this company has zero value to shareholders. Building electric vehicles from scratch is an expensive endeavor. Evergrande Health’s negative equity stems from the fact that it has accrued 94.7 billion yuan in debt. Its parent, for instance, has provided a three-year, 32.2 billion yuan loan due next July, with interest rates ranging from 7.6% to 8%. Last year, finance costs in the EV business alone came in at 2.2 billion yuan, or 2.6 times the profit generated from the healthcare segment. As a result, Evergrande Health has no price-to-earnings, or price-to-book, to speak of — both are negative. But then liquidity and policy-driven markets can create very strange phenomena. Speculative capital flows have have already arrived in Hong Kong — just look at the stronger local dollar, which by ordinary logic would have weakened as U.S. moved to strip the city of its special status. Trading will become even cheaper, too. Huatai International Ltd., the Hong Kong arm of China’s third largest broker, is no longer charging commissions.Meanwhile, animal spirits returned to China’s $9.7 trillion stock market in July. At this market cap, Evergrande Health can just do a secondary listing on the mainland if it’s short on cash, without having to prove to regulators that it has an “edge” or “world-leading technology.” A sky-high valuation in China, in turn, would support its Hong Kong-listed shares, one could argue. Hong Kong’s stock market is an interesting hybrid, part-American because of the Hong Kong dollar peg, and part-Chinese because many mainland companies list there. Now that both U.S. and China markets have gone into a trading frenzy, it's only natural that Hong Kong will catch up. So don’t be surprised if more Tesla wannabes start cropping up. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Shuli Ren is a Bloomberg Opinion columnist covering Asian markets. She previously wrote on markets for Barron's, following a career as an investment banker, and is a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
While Evergrande Health Industry Group Limited (HKG:708) shareholders are probably generally happy, the stock hasn't...
An embattled Chinese entrepreneur who made his name through a star online video firm has filed for bankruptcy in the US, but said he is determined to build his proposed electric car that has hit a series of roadblocks.Jia Yueting, 46, founder of electric car start-up Faraday Future and streaming company LeEco, said he had repaid US$3 billion worth of debt while another US$2 billion was still outstanding, according to a statement published by his team on Monday.Jia filed for Chapter 11 bankruptcy on Sunday and has established a creditor trust to receive all of his equity interest and personal assets in the US under the debt restructuring plan, the statement added. Jia controlled a 33 per cent stake in Faraday.The trust will be managed by a committee of creditors and a trustee.Faraday Future's electric concept car is shown at an unveiling in Las Vegas, on January 4, 2016. Photo: Reuters alt=Faraday Future's electric concept car is shown at an unveiling in Las Vegas, on January 4, 2016. Photo: ReutersJia's team said that the failed tycoon would return to mainland China to pursue fresh opportunities in developing Faraday Future and would continue to lead the management team as the EV firm chased a so-called "dual home market" strategy in the US and China.Jia's assets in the US that were transferred to the creditor trust included all of his shares in Faraday Future, of which he owns 33 per cent."The matter of [Jia's bankruptcy] will not affect any of Faraday Future's normal business operations," the company said in a statement.Jia had ambitions of competing with America's bestselling electric carmaker Tesla as he developed Faraday, hoping to be a front runner in the US and China. The EV company has been mired in financial difficulties since 2016 as it piled up debt."If he still wants to keep his EV dream alive, he would need to prove that Faraday has the capability of building top-class cars soon," said Yin Ran, a Shanghai-based angel investor dealing with the manufacturing sector."Debt restructuring and personal bankruptcy will not help him regain lost ground."Faraday had targeted December 2018 for the production of the FF91, a luxury SUV, and planned to deliver the first batch of cars in the first quarter of this year. But the plans did not materialise. Developer China Evergrande's Hong Kong unit surges by 66.2pc after investment in electric car maker FFFaraday settled a dispute with Evergrande Health Industry Group, a unit of property conglomerate China Evergrande Group controlled by Chinese billionaire Hui Ka-yan at the beginning of this year.At the end of 2017, Evergrande Health said it would invest US$2 billion in Faraday over three years for a 45 per cent stake, bailing out the ailing carmaker. But the two companies were later embroiled in a series of disputes.Evergrande accused Faraday of manipulating it into paying money ahead of schedule, while Faraday said Evergrande was deliberately delaying investment to starve the company and obtain control of its intellectual property.China's once-buoyant EV segment has hit a blip in the past several months after Beijing slashed cash subsidies to buoy sales of green cars.The China Association of Automobile Manufacturers recently lowered its forecast for sales of new energy vehicles in 2019 to 1.5 million units from 1.6 million units.For more insights into China tech, sign up for our tech newsletters, subscribe to our Inside China Tech podcast, and download the comprehensive 2019 China Internet Report. Also roam China Tech City, an award-winning interactive digital map at our sister site Abacus.This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2019 South China Morning Post Publishers Ltd. All rights reserved. Copyright (c) 2019. South China Morning Post Publishers Ltd. All rights reserved.